How’s This for a Private Equity Conflict?

July 13, 2016

Some deals beget more drama than others. Case in point: WatchGuard Technologies, a Seattle-based provider of security-related hardware. 


WatchGuard’s 2006 sale to two private equity firms prompted an antitrust lawsuit, and here’s why. Back then, Francisco Partners bid $4.60 a share and Vector Capital offered $4.65 a share before Vector withdrew its interest. As the only remaining buyer, Francisco lowered its bid to $4.25 a share — an offer that was ultimately accepted. Then, Francisco reached an agreement for Vector to team up on the buyout, at those terms — hence the lawsuit. (It ended up being dismissed, with the judge ruling that the takeover price wasn’t decided by collusion, but rather a lack of market interest.)  Read more

Source: Bloomberg